The Conflict in Iraq

Funding for Chalabi's Group Will End

Pentagon had drawn fire from lawmakers over its support of the Iraqi National Congress.

WASHINGTON — Ahmad Chalabi, the controversial Iraqi exile once favored by high-ranking Bush administration officials to lead postwar Iraq, is losing his Pentagon funding, a senior U.S. official told a Senate committee Tuesday.

For months, congressional critics have complained about the $340,000 a month the Pentagon has been paying Chalabi and his group, the Iraqi National Congress, money that continued to flow even after U.S. intelligence agencies found that prewar information provided by the INC about then-Iraqi President Saddam Hussein's weapons programs was at times misleading, inflated or even fabricated.

In testimony before the Senate Foreign Relations Committee on Tuesday, Deputy Defense Secretary Paul D. Wolfowitz, one of Chalabi's strongest supporters in the administration, said the Pentagon had decided to stop funding the INC.

Wolfowitz's explanation was terse. The decision, he said, "was made in light of the process of transferring sovereignty to the Iraqi people. We felt it was no longer appropriate for us to continue funding in that fashion."

Wolfowitz also praised the INC's efforts in Iraq.

"There's been some very valuable intelligence that's been gathered through that process that's been very valuable for our forces," he said. "But we will seek to obtain that in the future through normal intelligence channels."

A spokesman for the INC said the payments would probably end June 30, the day the U.S. is scheduled to hand over sovereignty to an interim Iraqi government.

It was unclear whether the cutoff marked a final break between Chalabi -- who for years was one of the most effective Iraqi exiles in lobbying for help to overthrow Hussein's regime -- and the Bush administration.

So-called neoconservatives, who have been among Chalabi's strongest supporters in Washington, expressed anger Tuesday.

"I think that the Iraqi National Congress and Ahmad Chalabi in particular are the best hope for Iraq, so of course I think it is a mistake," said former Pentagon advisor Richard Perle.

The Pentagon's money was "funding an intelligence operation which I am reliably informed saved American lives," Perle said. "If it isn't reconstituted in some other form, it is possible that lives will be lost because we'll be deprived of that intelligence."

But Chalabi also had harsh opponents, both in the U.S. and in the Arab world. Sen. Joseph R. Biden Jr. (D-Del.), one of Chalabi's most consistent critics, welcomed the Pentagon's decision.

"Too many of the members of the administration banked too much on Chalabi," Biden said in an interview. "That is part of the reason why we lacked legitimacy in Iraq in the first place."

A spokesman for the INC in Washington said Tuesday that the group had expected the cutoff.

"It was natural" that the Pentagon's financial support for the INC would end June 30, said Entifadh Qanbar, the spokesman. It would be improper, he said, for the U.S. to continue funding Iraqi political parties in a newly sovereign nation.

The INC, he said, has other sources of funding that will make it possible for the group to continue its political activities in Iraq, and the loss will not affect the group's relationship with the U.S.